Online pet products retailer Paws for Life has closed their series A funding round with a $1.5 million investment from Blue Sky Alternative Investments.
Launched in 2011, Paws for Life has shipped almost 100,000 orders of pet food and accessories in the last year.
Co-founder and chief executive Michael Frizell told StartupSmart the pet industry was one of the hottest investment areas right now, and his idea was spurred by a conversation with a private equity investor who told him it was an industry ready to boom.
Frizell explored four different business models for a pet food business before meeting a highly successful start-up in the US operating under a subscription model, and decided to pursue that option.
The new funds will go towards developing the systems and 25-strong team at Paws for Life.
“A lot of people are good at getting a company off the ground, but to get from the stage from two people turning over a million to where we are now and beyond with 20-plus people turning over north of 10 million needs totally different skills,” Frizell says, adding they intend to triple the size of the business in the next year.
Frizell says they’ll be building out the finance, marketing and customer service parts of their team. They’ll also be hiring someone to lead the development of the product range, currently around 3000 items to between 7000 and 10,000 within the year.
He adds their challenge will be staying focused on their customers as they scale rapidly.
“Our biggest challenge is to make sure the service doesn’t worsen or we neglect our existing customers so they start to lose trust. It’ll be a challenge, but it’s also our number one focus to make sure our customers stay happy with us,” Frizell says, adding building systems so everything runs like clockwork is part of their strategy.
This is the second investment round for Paws for Life, which raised $1 million from angel investors last year.
In a statement, venture capital investment director at Blue Sky Alternative Investments Dr Elaine Stead says Paws for Life had a clear value proposition for customers, a large market and a high growth profile.
“First and foremost at Blue Sky, we back the people behind the business, as they are the key drivers of success and co-founders Michael Frizell and James Edwards have overseen Paws for Life’s growth since it was established in 2011,” Stead says.
“Paws for Life is currently the number one online pet company in Australia and we’re confident that this is the team to take the online market to the next level. A similar business in Europe, Zooplus, has become a market leader in the space with turnover of over four hundred million euros per year and they are still expanding. We’re thrilled to be investing at this exciting time of growth.”